Gaming the EC2 pricing system

Posted by nuxi on 2009-Dec-15 at 02:01:41 in Computers (Login to reply)

Amazon EC2 just rolled out a new instance type called a spot instance. So the short version is that each hour Amazon sets a spot price based on current supply and demand. Users of EC2 can have instances run as long as the price is beneath a spot limit that they set.

So I checked the recent spot pricing for an m1.small machine in the us-east zone and its between $0.025 and $0.035 per hour. This same machine as an on-demand instance (the original type) is $0.085. Now Amazon's goal is clearly to monetize their idle CPU time by offering a low cost option for data analysis work. But, if we make one little assumption we can use it to get a discount for on-demand instance.

So what do you think the chances are that Amazon has capped the spot price at the normal instance price? If they did, then you could just convert all your on demand instances to spot instances with the spot limit set to the normal price. That way your instance always stays up and you get a discount when the spot price is lower!

This only works for on demand instances though, a 3-year reserved instance is $0.041/hr and a 1-year reserved instance is
$0.056/hr for that same machine type. Depending on where the market goes, its probably a safer bet to keep those reservations.

Update: On a side note, I wonder if Amazon will actually bill me $0.052 for the two $0.026 instances I started for a moment while playing with it. I've always wanted to write a check to my credit card company for $0.06